The 10-second takeaway
For the quarter ended March 31 (Q1), Merck missed estimates on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue shrank. Non-GAAP earnings per share dropped. GAAP earnings per share dropped.
Gross margins contracted, operating margins shrank, net margins grew.
Merck booked revenue of $10.67 billion. The 14 analysts polled by S&P Capital IQ expected to see revenue of $11.10 billion on the same basis. GAAP reported sales were 9.0% lower than the prior-year quarter's $11.73 billion.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.85. The 17 earnings estimates compiled by S&P Capital IQ predicted $0.79 per share. Non-GAAP EPS of $0.85 for Q1 were 14% lower than the prior-year quarter's $0.99 per share. GAAP EPS of $0.52 for Q1 were 7.1% lower than the prior-year quarter's $0.56 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 62.9%, 270 basis points worse than the prior-year quarter. Operating margin was 17.0%, 760 basis points worse than the prior-year quarter. Net margin was 14.9%, 10 basis points better than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $11.54 billion. On the bottom line, the average EPS estimate is $0.92.
Next year's average estimate for revenue is $46.23 billion. The average EPS estimate is $3.64.
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 2,703 members out of 2,917 rating the stock outperform, and 214 members rating it underperform. Among 785 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 746 give Merck a green thumbs-up, and 39 give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Merck is outperform, with an average price target of $48.14.
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